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May 08, 2026
Chart of the Day
The Philippines’ first quarter gross domestic product grew by 2.8% year-on-year, below the 3.3% consensus estimate and the previous quarter’s 3.0% growth. The sluggish growth reflects the broad-based weakness amid domestic political headwinds and rising inflation. Source: Philippine Statistics Authority
Financial market updates
The USD/PHP exchange rate opened 45 centavos lower at 60.85 on Thursday, tracking the decline in the dollar and oil prices amid growing optimism that a deal between the US and Iran is near.
The pair extended its decline despite the presence of corporate demand as exporters chased lower levels and weaker GDP print reduced expectations of aggressive Bangko Sentral ng Pilipinas rate hikes.
The pair broke multiple support levels, falling below 60.85 and 60.55 to reach 60.345, aided by offshore non-deliverable forwards declines during thin afternoon liquidity.
The USD/PHP exchange rate ultimately closed at 60.42, or 88 centavos lower day-on-day.
The current support levels of USD/PHP are 60.00/25, while the resistance levels are 60.55/85.
The peso government securities (GS) market opened with the 1st quarter gross domestic product growth rate falling short of expectations at 2.8%, versus Bloomberg consensus at 3.3% and the 5.4% growth recorded for the same period last year.
This, alongside better risk appetite from an anticipated US-Iran peace deal, sparked a rally in GS across the yield curve.
FXTN 20-17 (5Y) led the move, rallying 57.5 basis points (bps) to 6.875%. 4Y and 10Y bonds also outperformed, with yields down 45 bps to around 6.875% and 7.15%, respectively.
Demand gradually emerged as investors took advantage of elevated yields, with retail clients concentrated in the 1-5Y tenors.
Players will likely face the market with cautious optimism, as the US and Iran weigh opportunities to end the war and reopen the Strait of Hormuz. The lingering effects of oil prices are still expected to persist and weigh on inflation and GDP.
Coupled with the Bureau of the Treasury's recent aggressive auction-awarding behavior, risk appetite is still expected to remain relatively subdued in the near-term.
The Philippine Stock Exchange index (PSEi) ended 67.06 points higher at 6,034.27 on Thursday, as easing oil prices and improving global risk sentiment outweighed concerns over the weak first quarter gross domestic product print.
Value turnover improved to PHP 7.28 billion, while foreign funds remained net buyers with inflows of PHP 213.51 million.
The advance was driven by strong gains in Century Pacific Food Inc. (+7.83%), BDO Unibank Inc. (+4.74%), and Monde Nissin Corp. (+4.32%).
On the downside, Converge Information and Communications Technology Solutions, Inc. (-1.61%), SM Prime Holdings Inc. (-1.03%), and JG Summit Holdings Inc. (-0.71%) lagged.
Sentiment broadly tracked stronger regional markets amid growing optimism surrounding ongoing US-Iran peace discussions.
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